There is an old cliché that “small is beautiful”, the corollary being that small is also simple. In business the assumption is often made that smaller companies must by definition be simpler, but surprisingly the opposite is very often the case.

Large ERP implementations have many characteristics that make planning and budget preparation more complex. Clarity on the scope, duration and phasing of the implementation is crucial, so that phasing of spend can be considered as part of preparing the budget.

At Lumenia we always try to focus our clients’ efforts on delivery of benefits. The basic premise of the argument is that a project that has been delivered on time and on budget cannot be considered successful unless it has delivered the benefits it set out to. In fact we would argue that, within reason, benefit delivery is more important than either time or budget.

This blog considers how to identify and quantify the benefits that your ERP project should deliver and what it means if quantifiable benefits are hard to find.

Figuring out what a potential ERP project will cost can be a complicated task. Without a proper understanding of the scope of a proposed project and a host of other considerations it is very difficult to make a sensible estimate of cost. While budgeting for any ERP implementation project is usually done under a number of fairly standard headings (Software Licences, Software Support & Maintenance, Hardware/Infrastructure, External Consultancy Services and Internal Costs), a realistic budget can only be prepared once there is clarity on the project scope.

When you built the business case for your new ERP system, it included a list of expected benefits. Now that the system is live, have those benefits been realised and have you achieved the expected return on investment?

One of the criteria used for measuring ERP project implementation success is budget versus actual. Achieving this goal starts before the project does, with the creation of a thorough and realistic budget.

When starting an ERP implementation, expected benefits are usually identified and used to justify the project spend – and then ignored during the implementation! Instead, the focus is on achieving budget and delivering the project on-time. This is a big mistake and broadening the focus can impact on the success of the project and ensure that the benefits are realised.

Stories of disastrous ERP projects are enough to ensure sleepless nights for CEOs or CIOs looking at the prospect of implementing a new ERP system. So what should you do to ensure that your project is a success?